1 The Top 10 Employment Law Mistakes Contractors Make and H - PowerPoint Presentation

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The Top 10 Employment Law Mistakes Contractors Make and How to Avoid Them

North/East Roofing Contractors AssociationSeptember 30, 2014

Philip J. Siegel, Esq.Hendrick, Phillips, Salzman & Flatt230 Peachtree Street, Suite 2500Atlanta, Georgia 30303404-522-1410404-522-9545 Faxpjs@hpsf-law.comSlide2

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Mistake No. 1:

Treating “employees” as “independent contractors”Slide3

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Employee v. Independent Contractor

These are legal terms with legal consequencesJust because you say it, doesn’t make it soWhether you issue a 1099 is not determinative of the issue

Variables at playWho controls the manner in which the work is done?Who sets the workers’ hours?How long does the relationship last?What is the method of payment?Who provides the tools for the job? Slide4

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Employee v. Independent Contractor

Misclassified workers are entitled to employee benefits, including workers’ comp benefitsMisclassified workers may be entitled to overtime and minimum wagesFLSA violations come with liquidated, or doubled, damages

Misclassifying workers might mean paying back taxes and/or penalties for federal and state income taxes, FICA, and unemploymentSlide5

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Avoiding Mistake No. 1

Conduct a relationship auditUse formal contracts with independent contractorsThe contract should include a statement which has the individual agreeing to his independent contractor statusInclude a statement that acknowledges the individual is free to perform services for other businesses

Ensure independent contractors maintain their own corporate documents.Slide6

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Mistake No. 2:

Making improper deductions from an employee’s paycheckSlide7

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Avoiding Mistake No. 2

Proper deductions not required by law require the employee’s consentInclude language on loan documents where the employee consents to deductions from his/her payWhen employees are asked to sign out equipment/tools, include the consent on the documentYou cannot keep a paycheck hostageSlide8

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Permitted Deductions for Exempt Employees

Absence of one or more full days for personal reason other than sickness or disabilityAbsence of one or more full days for sickness or disability if made in accordance with a plan that provides for paid leave

Offset jury or witness fees or military payPenalties for infractions of safety rules of major significanceUnpaid disciplinary suspensions of one or more full days for workplace conduct rule infractionsInitial/Terminal week – full salary not requiredSlide9

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Mistake No. 3:

Failing to document disciplinary actions and performance issuesSlide10

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Documenting Discipline

The three most important words in employment law: Document, document and documentIgnore the “niceness” of the employeeConduct annual reviewsAlthough document issues consistently and not just in the annual review

Document both good and bad performancehelps to defend employment decisionsSlide11

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Documenting Discipline

A necessary element for the unforeseeable employee misconduct defenseBe sure to also take steps to discover infractionsEstablishes tangible evidence in the event a charge is filed with the EEOCSlide12

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Avoiding Mistake No. 3

Publish a disciplinary policy, then follow it!Verbal warnings should be in writingInclude specific examplesIdentify any prior counseling and failure to correct issues

Identify consequences for failing to correct issueState the facts, be objective and avoid opinionsAllow the employee an opportunity to sign the document, or note the refusal to signSlide13

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Mistake No. 4:

Failing to obtain a release or severance agreement from a terminated employeeSlide14

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Avoiding Mistake No. 4

Consider whether the agreement is worth the riskIs the employee in a protected category?Will there be a replacement? Is the replacement in a difference protected category?Has the employee recently engaged in protected activity?The agreement may leave the employee considering whether they have a legal claimSlide15

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Avoiding Mistake No. 4

An enforceable agreement must provide “consideration”The employee must be given something other than what they are already entitled toConsult with an attorney to obtain an enforceable release from ADEA claimsSlide16

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Mistake No. 5:

Failing to publish accurate job descriptionsSlide17

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Job Descriptions

Assists with defenses to Title VII claimsEstablishes performance and conduct standardsHelps assist courts to determine “supervisor” statusThe ADA necessitates the use of job descriptions

Identifies the essential functions and physical tasks required for the jobMay help to defeat claims for overtimeDetail supervisory dutiesDetail authority to hire, fire, promote or assignSlide18

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Job Descriptions

Be sure to include all essential functions of the jobAttendance standardsLifting requirementsAvailability to work overtime or weekends

Travel requirementsMake sure job descriptions are accurate and up to datePeriodically update after interviews with employeesSlide19

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Mistake No. 6:

Improperly calculating overtime paySlide20

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Calculating Overtime Pay

This mistake is most often made by contractors that pay employees at a piece rateThis mistake is also often made by those contractors that pay their employees a flat weekly rate for work performedThis mistake is also often made by those contractors not familiar with the travel pay or waiting time rulesSlide21

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Avoiding Mistake No. 6

Understand how to calculate the “effective hourly rate”On-duty vs. off-duty waiting time“Periods during which an employee is completely relieved from duty which are long enough to enable the employee to sue the time effectively for his/her own purpose are not hours worked.”Slide22

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Avoiding Mistake No. 6

Understand travel payPortal-to-Portal travelTravel between sitesOne-day assignmentsOvernight travelmiscellaneousSlide23

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Mistake No. 7:

Failing to understand what conduct is prohibited in the context of a union organizing driveSlide24

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Understanding T.I.P.S.

Do not ThreatenDo not InterrogateDo not Promise

Do not conduct SurveillanceSlide25

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Avoiding Mistake No. 7

Union Authorization CardsDO NOT LOOK!Acknowledging employees signatures on cards can result in voluntary recognition of the union, without the need for an electionSlide26

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Mistake No. 8:

Believing the company’s employment agreement is enforceable and protects your customers, employees, trade secrets and confidential informationSlide27

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Restrictive Covenants

Non-solicitation of customersNon-compete provisionsNon-solicitation of employees

Non-disclosure provisionsSlide28

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Avoiding Mistake No. 8

Go no further than necessary to protect the “legitimate business interests” of the companyReasonable geographic limitationReasonable temporal limitationAvoid going too far with protecting your customersSlide29

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Avoiding Mistake No. 8

Confidential Information and Trade SecretsTrade secrets definedEnsure you take steps to protect the company’s trade secrets or confidential informationApplicable temporal restrictionsSlide30

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Mistake No. 9:

Failing to publish a policy on racial or sexual harassmentSlide31

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Harassment under Title VII

Employer’s liability for harassment under Title VIIIs the harasser a co-worker or supervisor?Harassment by a supervisorSupervisor harassment with tangible employment action invites strict liability

Constructive discharge is not a tangible employment action, with one exceptionSlide32

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Avoiding Mistake No. 9

Publish a policyBe sure to include contact information for the person that receives claimsIdentify at least two people to receive claimsFollow the policy . . . And document it!

Take prompt remedial action by conducting an investigationDo not promise absolute confidentialityExplain information will be revealed on a need-to-know basisSlide33

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Mistake No. 10:

Failing to comply with prevailing wage requirementsSlide34

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The Davis-Bacon Act

Applies to federal government construction contracts in excess of $2,000Little Davis-Bacon Act statutes apply for state government construction contractsRequires the payment of prevailing wages to employeesSlide35

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The Prime Contractor’s Project Responsibilities

Responsible for the full compliance of all employers on the projectResponsible for posting a copy of the wage rate sheet and a copy of the DOL’s Notice to Employees poster at the jobsiteMust include contractual provisions in subcontracts (incorporation by reference is insufficient)Slide36

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Thank You!

ANY QUESTIONS?

Presented byPhilip J. SiegelHendrick, Phillips, Salzman & Flatt230 Peachtree Street, N.W., Suite 2500Atlanta, Georgia 30303(404) 522-1410pjs@hpsf-law.com